Justia Business Law Opinion Summaries

EpicentRx, Inc. and several of its officers, employees, and affiliates (collectively, the defendants) challenged a trial court order denying their motion to dismiss plaintiff-shareholder EpiRx, L.P.’s (EpiRx) lawsuit on forum non conveniens grounds. The defendants sought dismissal of the case based on mandatory forum selection clauses in EpicentRx’s certificate of incorporation and bylaws, which designated the Delaware Court of Chancery as the exclusive forum to resolve shareholder disputes like the present case. The trial court declined to enforce the forum selection clauses after finding that litigants did not have a right to a civil jury trial in the Delaware Court of Chancery and, therefore, enforcement of the clauses would deprive EpiRx of its inviolate right to a jury trial in violation of California public policy. The California Court of Appeal agreed with the trial court that enforcement of the forum selection clauses in EpicentRx’s corporate documents would operate as an implied waiver of EpiRx’s right to a jury trial, thus the Court concluded the trial court properly declined to enforce the forum selection clauses at issue, and denied the defendants’ request for writ relief. View "EpicentRx, Inc. v. Super. Ct." on Justia Law

Russell is an orthopedic trauma surgeon who invented numerous products such as bone substitutes and surgical devices. He, along with other inventors were shareholders in CelgenTek, a medical device firm. According to the Inventors, Russell’s creations were game-changers in the field of orthopedics. In 2015, the Inventors entered into an agreement with Zimmer as the exclusive distributor of certain CelgenTek products. CelgenTek was experiencing dire financial problems. Zimmer acquired a 10% ownership of CelgenTek for $2 million and purchased the remaining 90% in 2016. The Inventors retained the right to a small percent of the net yield on the products it developed (earnout products). Zimmer agreed that it would use “Commercially Reasonable Efforts,” as defined in the Agreement, to sell the earnout products. From the date the agreement through 2019, Zimmer paid the Inventors approximately $130,000 in earnout payments. The Inventors sued, alleging that Zimmer failed to use Commercially Reasonable Efforts.The Seventh Circuit affirmed that the Inventors failed to state a claim. Many of Zimmer's 21 complained-of actions and inactions reflect how the Inventors hoped Zimmer would have marketed and sold the earnout products or what the Inventors would have done had they not put Zimmer in charge of sales. Others allege broken promises that Zimmer purportedly made before the signing of the agreement that are not actionable due to the agreement’s integration clause. View "Russell v. Zimmer, Inc." on Justia Law

Defendant-Appellant Petróleos de Venezuela, S.A. (“PDVSA”), an oil company wholly owned by the Bolivarian Republic of Venezuela, entered into two Note Agreements and a Credit Agreement with the predecessor-in-interest to now-Plaintiff-Appellee Red Tree Investments, LLC (“Red Tree”). PDVSA became delinquent on its obligations under the contracts. Red Tree’s predecessor-in-interest accelerated the outstanding debt. Then Red Tree initiated these actions in Supreme Court, New York County, which Defendants removed to district court. PDVSA claimed that any further payment under the Agreements was impossible and should therefore be excused. The district court granted summary judgment against PDVSA on the grounds that PDVSA had failed to provide sufficient evidence that payment was impossible or in the alternative, that any impediment to payment was not reasonably foreseeable. It therefore entered judgment in favor of Red Tree and imposed post-judgment interest. On appeal, PDVSA contends that the district court erred in concluding that no reasonable trier of fact could find that payment was impossible or that U.S. sanctions were unforeseeable. PDVSA further asserts that the district court incorrectly calculated post-judgment interest.   The Second Circuit affirmed. The court agreed with the district court that payment by PDVSA was not impossible. Further, the court concluded that the district court did not err in its calculation of post-judgment interest. The court explained that under the plain language of the Note and Credit Agreements, the outstanding principal and interest that accrued prejudgment—including both default and ordinary interest—are subject to default interest post-judgment. View "Red Tree Investments, LLC v. PDVSA, Petróleo" on Justia Law

In January 2017, Defendant-Appellant Petróleos de Venezuela, S.A. (“PDVSA”), an oil company wholly owned by the Bolivarian Republic of Venezuela, entered into a Note Agreement with then-Plaintiff-Appellee Dresser-Rand Company. PDVSA made two of the twelve payments due under the Note Agreement in April and July 2017 but failed to make any subsequent payments. In February 2019, Dresser-Rand declared PDVSA to be in default, accelerated the debt, and initiated this action in Supreme Court, New York County, which Defendants removed to the district court. PDVSA claimed that any further payment was impossible and should therefore be excused. The district court concluded that PDVSA had failed to prove that repayment was impossible. It therefore entered judgment in favor of Dresser-Rand. On appeal, PDVSA contends that the district court erred in concluding that payment was not impossible. PDVSA further asserts that the district court incorrectly calculated post-judgment interest.   The Second Circuit affirmed. The court agreed with the district court that payment by PDVSA was not impossible, and the court further concluded that PDVSA forfeited any arguments relating to post-judgment interest. The court explained that the evidence demonstrates that PDVSA never attempted payment to a different bank or in an alternative currency, nor did it investigate whether this manner of payment would have been truly impossible. Instead of the evidence shows, did nothing. PDVSA cannot benefit from the impossibility defense on speculation. View "Siemens Energy, Inc. v. PDVSA" on Justia Law

Defendant-appellee Malcolm Penney left a wedding which was held at The Springs Event Venue and proceeded to drive the wrong way down a highway. He crashed head-on into a vehicle driven by Marissa Murrow, killing her. Murrows' parents sued The Springs. They did not allege that The Springs over-served Penney. Rather, they alleged The Springs had a duty to prevent Penney from leaving, and to enforce their policies which prohibited outside alcohol from being brought onto the premises. The trial court determined that the event venue had no duty to prevent harm to third-parties such as the deceased, and it granted summary judgment to The Springs. The Oklahoma Supreme Court held that Oklahoma law did not recognize a duty on the part of a private event venue extending to third parties killed by a voluntarily intoxicated adult who attended, but was not "over-served" by the event venue. The trial court therefore did not err in denying the parents' Motion to Vacate/Modify. View "Murrow v. Penney" on Justia Law

The Georgia Supreme Court granted certiorari in this case to decide whether revenue generated from the lease of a bona fide coin operated amusement machine (“COAM”) qualified as “gross revenues” exempt from taxation under OCGA § 48-8-3 (43). Funvestment Group, LLC, the lessee of the COAMs at issue and the owner of the location where the COAMs were available for play, argued that revenues generated from the lease of COAMs were considered “gross revenues” exempt from sales and use tax. The Court of Appeals concluded that the subject lease revenues were not “gross revenues” and that the exemption only applied to money inserted into COAMs for play. The Supreme Court concluded the Court of Appeals erred in reaching this conclusion, and thus reversed the Court of Appeals' judgment. View "Funvestment Group, LLC v. Crittenden" on Justia Law

The Supreme Court held that a commercial property insurance policy did not provide coverage for the economic losses JGB Vegas Retail Lessee, LLC suffered when COVID-19 forced JGB to shut down abruptly.JGB was insured under a policy with Starr Surplus Lines Insurance Co. amidst the closures and accompanying financial troubles of the COVID-19 pandemic, JGB filed a claim with Starr seeking coverage for lost business income, extra expenses, and other applicable coverage. When Starr did not respond JGB brought suit, claiming that the presence of COVID-19 on the property created the requisite "direct physical loss or damage" covered under the policy. Starr moved for summary judgment, which the district court granted in part. Thereafter, Starr filed the instant petition seeking a writ of mandamus challenging the denial of summary judgment on the remaining claims. The Supreme Court affirmed, holding that the district court erred in denying summary judgment because JGB's claims for losses resulting from COVID-19 were excluded from coverage. View "Starr Surplus Lines Insurance Co. v. District Court" on Justia Law

Plaintiffs Dominick Martin and Rusty Rendon filed suit under the Unruh Civil Rights Act for disability discrimination, contending that one of Thi E-Commerce’s Web sites discriminated against the blind by being incompatible with screen reading software. Plaintiffs contended the court erred by concluding that a Web site was not a place of public accommodation under the Americans with Disabilities Act (incorporated into the Unruh Act). Although this was an issue that has split the federal courts (and California Courts of Appeal), the appellate court here concluded the ADA unambiguously applied only to physical places. Moreover, even if the Court found ambiguity and decided the issue on the basis of legislative history and public policy, it would still conclude that the ADA did not apply to Web sites. Plaintiffs alternatively contended they stated a cause of action against Thi E-Commerce on a theory of intentional discrimination. To this, the Court of Appeal concluded the allegations of the complaint did not state a claim under that theory either and affirmed the judgment. View "Martin v. THI E-Commerce, LLC" on Justia Law

Septic systems comprise a septic tank that isolates and contains the sewage; the remaining wastewater flows through a drain field, where microorganisms treat it. Customers have two options for private septic systems—aerobic treatment units (contained systems), or soil-based/open-bottom treatment systems (T&D systems). Geomatrix markets and sells a T&D system, while many of its competitors sell contained systems.Since 1970, NSF has offered certification for the wastewater treatment industry, A manufacturer needs to obtain certification before marketing products in at least 37 states. This standard is developed through a voluntary consensus process, overseen by a joint committee staffed by NSF employees, state regulatory officers, industry manufacturers, and consumers. Geomatrix obtained certification. Geomatrix alleges that competitors then began conspiring against T&D systems, questioning whether T&D systems should be entitled to certification and disparaging the efficacy of T&D systems. The alleged conspiracy affected Geomatrix’s business by preventing it from obtaining state regulatory approval, although its certification should have made it possible to do so. Ultimately, Geomatrix withdrew its NSF certification. NSF has not adopted a new standard; discussions remain ongoing.Geomatrix filed suit, alleging violations of the Sherman Act and the Lanham Act. The Sixth Circuit affirmed the dismissal of the suit. The defendants’ petitioning activity was immunized under the Noerr-Pennington doctrine. Geomatrix failed to show the proximate cause required for its unfair competition claims, and its promissory estoppel claims were based on statements that did not state a sufficiently definite promise. View "Geomatrix, LLC v. NSF International" on Justia Law

A Texas citizen brought state-law claims in federal court against “Dining Alliance Inc.” Prior to the suit, however, Dining Alliance Inc. had converted into Dining Alliance LLC (“Dining Alliance”), whose citizenship may include both Texas and Delaware. This potential jurisdictional defect was not recognized because Dining Alliance originally answered under the name Dining Alliance Inc. and represented itself as a Massachusetts citizen. Dining Alliance unacceptably hid the ball with respect to the elementary jurisdictional facts during the entire course of litigation, including on appeal. The district court dismissed its third-party claims with prejudice as a sanction for that willful abuse of the judicial process.   The Fifth Circuit affirmed. The court explained that a district court may invoke its inherent power to dismiss claims with prejudice in order to protect “the integrity of the judicial process.” It must find that the litigant acted in bad faith or willfully abused the judicial process. It must also find that “lesser sanctions would not serve the best interests of justice.” The court wrote that contrary to Dining Alliance’s assertion, the district court found that Dining Alliance itself willfully abused the judicial process based on the totality of its litigation misconduct, which culminated in its refusal to obey the court’s order. That misstatement was reckless because the company’s transformation into Dining Alliance LLC should have been and apparently was known at the time. Accordingly, the court held that the district court neither lacked jurisdiction nor abused its discretion in dismissing Dining Alliance LLC’s third-party claims with prejudice as a sanction for its willful abuse of the judicial process. View "Dining Alliance v. Foodbuy" on Justia Law